Five new grants, one CVSG, but no Arlene’s Flowers

Posted Mon, June 18th, 2018 2:26 pm by Amy Howe

This morning the Supreme Court issued orders from the justices’ private conference last week. The justices added five new cases to their merits docket for next term, and they called for the views of the U.S. solicitor general in a challenge to California’s ban on foie gras, but they did not act on Arlene’s Flowers v. Washington, the case of a florist who argues that requiring her to create custom floral arrangements for a same-sex wedding would violate her religious beliefs.

The justices agreed to review a ruling by the U.S. Court of Appeals for the 9th Circuit in an important antitrust case against computer giant Apple. The plaintiffs in the case, purchasers of iPhones and iPhone apps, argue that Apple monopolized the market for the apps by requiring app developers to sell their apps exclusively to Apple’s App Store and then charging those developers a 30-percent commission on each sale. The iPhone users contend that, as a result, they paid more for the apps than if they had bought them elsewhere, and they asked a federal court in California to award them, under federal antitrust law, three times the amount that Apple allegedly overcharged them.

The district court turned them down, relying on a 1977 Supreme Court decision holding that courts cannot award triple damages to plaintiffs whose claim is that the defendant overcharged someone else, who then passed that charge on to the plaintiffs. The district court explained that in this case, app developers were paying the 30-percent commission to Apple and then passing the charges on to the plaintiffs. A federal appeals court reversed, holding that the lawsuit could go forward because Apple sold the apps directly to iPhone users through its App Store.

Apple went to the Supreme Court and asked it to weigh in; last year the justices asked the federal government for its views. In a brief filed last month, U.S. solicitor general Noel Francisco urged the justices to grant review, telling them that the issue is important and will become even more so “as commerce continues to move online.”

In Timbs v. Indiana, the justices will consider whether the Eighth Amendment’s bar on “excessive fines” is incorporated against (that is, applies to) state and local governments under the due process clause of the 14th Amendment. Although it sounds somewhat esoteric, many regard the question as an important one, because fines and forfeitures have skyrocketed in the past few decades, becoming a source of revenue for the governments that impose them.

The issue arises in the case of Tyson Timbs, an Indiana man who pleaded guilty to drug charges and received a six-year sentence – one year in home detention, and the remaining five on probation. The state also ordered Timbs to forfeit his 2012 Land Rover, which he had purchased with the proceeds of his father’s life insurance policy, on the ground that he had used the car to transport drugs. A state appeals court agreed with Timbs that the Eighth Amendment’s bar on excessive fines applies to the states, and it ruled that the forfeiture of the Land Rover was unconstitutional because the penalty was “grossly disproportionate” to Timbs’ offense. The Indiana Supreme Court reversed, emphasizing that the U.S. Supreme Court has never specifically ruled that the excessive fines clause applies to the states.

Timbs’ petition for review garnered support from a wide range of groups. The U.S. Chamber of Commerce, which describes itself as the “world’s largest business organization,” argues that “state and local legislatures are authorizing – and executive officials are seeking – excessive fines and forfeitures for relatively modest violations of the law.” Although the Eighth Amendment’s excessive fines clause acts as a check on excessive fines imposed by the federal government, the Chamber explains, the “lack of a uniform, similar constraint on the governments in the 50 states is needlessly driving up costs for businesses, increasing prices for consumer goods and services, and undermining economic growth.”

The Southern Poverty Law Center adds that state and local governments are using fines and forfeitures like this one purely to generate revenue to fund a “burgeoning prison population” without raising taxes. And this focus on revenue generation, the center continues, can lead to “unconstitutional and racially motivated behavior by law enforcement and municipal employees.” Indeed, the center contends, for the poor, “fees and fines mean that even the most casual encounter with the criminal justice system can have catastrophic results,” affecting everything from ability to pay child support to credit ratings and even leading to incarceration for failing to pay the fines.

This term saw a return to the Supreme Court by Floridian Fane Lozman, “floating home” owner and local-government watchdog. The justices today announced that they would review the case of another repeat plaintiff: Alaskan Jim Sturgeon, hovercraft hunter. (Sturgeon’s petition contains a fun fact: “If Manhattan had the same population density as Alaska, 28 people would live there.”)

Sturgeon’s case began over a decade ago, when rangers from the National Park Service told him that it was a crime to operate his hovercraft (which he was using to hunt moose) on the Nation River, which is within the Yukon-Charley Rivers National Preserve. The rangers cited a Park Service rule that prohibits the use of hovercraft on public lands; Sturgeon countered that the waterway was owned by the state, and he went to court to challenge the enforcement of the rule on the river. The lower courts ruled for the state, but in 2016 the Supreme Court threw out those rulings, holding that the lower courts had misconstrued the Alaska National Interest Lands Conservation Act, a federal law governing the National Park Service’s authority over lands in Alaska. The justices did not, however, say how the law should be interpreted, instead returning the case to the lower courts.

Sturgeon is now back at the Supreme Court, asking the justices to decide the same question that they declined to settle two years ago: whether the ANILCA bars the National Park Service from regulating other land – owned by the state, native corporations or private owners – within the boundaries of Alaska national parks. The U.S. Court of Appeals for the 9th Circuit ruled that the Nation River is actually “public land” because the federal government has a water right in it – a conclusion that Sturgeon describes as a “crushing blow to Alaska’s sovereignty” that gives the National Park Service “nearly limitless power over these non-federal waters.”

Another addition to the justices’ merits docket for next term is the case of Gilberto Garza, an Idaho inmate who in 2015 entered into two plea agreements (one for aggravated assault, the other for possession of a controlled substance) in which he waived his right to appeal. At his sentencing hearing, the court acknowledged the appeal waiver, but also told Garza about his right to appeal and his right to have a lawyer if he appealed.

Garza argues that his trial counsel was constitutionally inadequate because Garza repeatedly asked the lawyer to appeal, but the lawyer failed to do so because of the appeal waivers in Garza’s plea agreements. The question that the justices agreed to decide today is whether courts should assume that Garza was prejudiced (a key requirement for a ruling that Garza’s lawyer was ineffective) by his lawyer’s failure to appeal, or whether Garza actually has to show that he was prejudiced by indicating what issues he would have raised had he appealed – a much higher bar.

Securities and Exchange Commission Rule 10b-5(b) prohibits the making of untrue statements in connection with the purchase or sale of a security, while Rule 10b-5(a) bars deceptive conduct in connection with the offer, purchase or sale of a security. In Lorenzo v. Securities and Exchange Commission, the justices agreed to review the case of Francis Lorenzo, an investment banker who was charged with securities fraud after he sent potential investors emails containing false statements. The U.S. Court of Appeals for the District of Columbia Circuit ruled that Lorenzo had not violated Rule 10b-5(b) because his boss, not he, had actually made the misleading statements, but it also held that Lorenzo had violated Rule 10b-5(a) by engaging in a fraudulent scheme. Lorenzo asked the Supreme Court to review that ruling: Pointing to the court’s 2011 decision in Janus Capital Group v. First Derivative Traders, holding that only the person who makes a fraudulent statement can be held liable under Rule10b-5(b), Lorenzo contends that a misstatement, without more, cannot serve as the basis for a fraudulent-scheme claim under Rule 10b-5(a).

The justices once again did not act on Arlene’s Flowers, the case of Barronelle Stutzman, a Washington state florist who, like the Colorado baker, declined to provide her services – this time, original flower arrangements – to a same-sex couple for their wedding. After the state courts rejected her argument that requiring her to design floral arrangements for same-sex weddings would violate her First Amendment rights to free speech and the free exercise of her religion, Stutzman went to the Supreme Court, asking them to review that ruling. The justices put Stutzman’s appeal on hold until they ruled on Masterpiece Cakeshop v. Colorado Civil Rights Commission, the case of a Colorado baker who refused to make a custom wedding cake for a same-sex couple because doing so would violate his religious beliefs. Two weeks ago, by a vote of 7-2, the justices ruled that proceedings before the Colorado administrative agency that considered the baker’s case were unfairly tainted by hostility to religion. Stutzman now makes a similar argument, which the justices will apparently consider again at their conference this Thursday.

The justices asked the U.S. solicitor general to file a brief conveying the views of the United States in Association des Éleveurs de Canard et d’Oies du Québec v. Becerra, a challenge by a group of Canadian duck and goose farmers to California’s ban on foie gras (which the farmers describe as “perhaps the most maligned (and misunderstood) food in the world”). The farmers argue that the ban is superseded by federal laws governing the sale of poultry products in the United States; California’s attorney general counters that the state’s law is intended to prevent animal cruelty – a subject not addressed by the federal law at issue. There is no timeline for the federal government to weigh in.

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